Exhibit 10.14
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT is made and entered into as of
the 30th day of July, 1999, by and between AMITEK CORPORATION, a Delaware
corporation (hereinafter referred to as "Borrower"), and NATIONAL BANK OF
CANADA, a Canadian Chartered Bank (hereinafter referred to as "Lender").
WITNESSETH:
WHEREAS, Lender has previously extended financing to M&K TECHNOLOGY, INC.,
a Florida corporation ("M&K") and AMITEK CORPORATION, a Florida corporation
("Amitek Florida" or "Amitek", Amitek Florida and M&K hereinafter collectively
referred to as "Original Borrower"), as most recently evidenced by that certain
Consolidation Master Revolving Promissory Note in the principal amount of
Fourteen Million and 00/100 Dollars ($14,000,000.00) executed by Original
Borrower in favor of Lender dated as of February 8, 1999, and that certain CAPEX
Line/Term Promissory Note in the original principal amount of One Million Six
Hundred Seventy-Five Thousand and 00/100 Dollars ($1,675,000.00) executed by
Original Borrower in favor of Lender dated as of June 4, 1998 (collectively, the
"Original Notes"); and
WHEREAS, in connection with the indebtedness evidenced by the Original
Notes, the Original Borrower and Lender entered into that certain Loan Agreement
dated as of June 4, 1998, as amended by First Amendment to Loan Agreement dated
as of September 23, 1998, as further amended by Second Amendment to Loan
Agreement dated as of February 8, 1999 (collectively, the "Original Loan
Agreement"); and
WHEREAS, Amitek Florida has merged into the Guarantor (as defined herein),
with the Guarantor being the surviving corporation, and Guarantor immediately
after closing of the above described merger has conveyed all of the assets of
Amitek Florida to the Borrower and Borrower has assumed all liabilities of
Amitek (it being acknowledged that the Borrower is a wholly owned subsidiary
corporation of Guarantor), such that the Borrower is now the owner of all of the
assets and liabilities of Amitek Florida (collectively, the "Merger
Transactions"); and
WHEREAS, Borrower is a Delaware corporation and desires to obtain
extensions of credit of up to Fourteen Million Five Hundred Seventy-Six Thousand
Three Hundred Six and 54/100 Dollars ($14,576,306.54) from the Lender,
consisting of (i) a revolving line of credit in the principal amount of Fourteen
Million and 00/100 Dollars ($14,000,000.00), which consists of the assumption of
the existing Fourteen Million and 00/100 Dollar ($14,000,000.00) revolving line
of credit from Lender to Original Borrower (the "Loan"), which shall be used to
assist Borrower in connection with the merger of Amitek into Borrower with
Borrower being the surviving corporation and to support general working capital
requirements of the Borrower, and (ii) the assumption of an existing CAPEX
line/term loan in the current principal amount of Five Hundred Seventy-Six
Thousand Three Hundred Six and 54/100 Dollars ($576,306.54) (the "Term Loan")
and Lender is agreeable to allowing the assumption of the Loans (as defined
herein) up to such amounts subject to the terms and provisions set forth herein;
and
WHEREAS, Borrower wishes to assume all of the duties and obligations of
Amitek under the Original Loan Agreement; and
WHEREAS, the parties hereto wish to amend and restate the Original Loan
Agreement in its entirety in accordance with the terms and provisions of and as
provided herein.
NOW, THEREFORE, for and in consideration of the sum of Ten and 00/100
($10.00) Dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the loans
or extensions of credit heretofore, now or hereafter made or to be made to or
for the benefit of the Borrower by the Lender, the parties do hereby agree as
follows:
Article 1
RECITALS AND DEFINITIONS
1.1 Recitals. The foregoing recitals are acknowledged by the parties to be
true and correct, and are incorporated herein by reference.
1.2 Definitions. As used in this Agreement, the terms listed below shall
have the following meanings:
(a) "Advance": A disbursement by the Lender of a portion of the Loan
proceeds to partially assist Borrower in connection with the merger of Amitek
into Borrower with Borrower being the surviving corporation and to support
general working capital requirements of the Borrower.
(b) "Agreement" or "Loan Agreement": This Amended and Restated Loan
Agreement.
(c) "Borrower": AMITEK CORPORATION, a Delaware corporation.
(d) "Borrower Security Agreement": An Amended and Restated Security
Agreement from Borrower to Lender securing the Notes and all other obligations
and indebtedness of Borrower to Lender, which is a valid first lien on all of
Borrower's accounts, inventory, chattel paper, general intangibles, fixtures,
furniture, instruments, equipment and personal property now owned or hereafter
acquired by Borrower and all proceeds of the foregoing.
(e) "Borrower's Counsel Opinion Letter": A letter from Borrower's Counsel
in form and substance satisfactory to Lender and Lender's Counsel, opining as to
certain matters concerning the Loans.
(f) "Business Days": Days upon which the Lender is open for normal
business.
(g) "Cash Collateral Account". That certain cash collateral account
pledged by Borrower in favor of Lender, into which all collections shall be
remitted from a lockbox account into which
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Borrower's account debtors remit all payments, which collections shall be
applied against the Loan and Term Loans facility balances two (2) bank days
after receipt of available funds in the Cash Collateral Account. The Borrower
shall not have access to the lockbox or the Cash Collateral Account.
(h) "Closing": The time of the execution and delivery of this Agreement by
Borrower and Lender.
(i) "Code": The Internal Revenue Code of 1986, as amended from time to
time, and applicable Department of Treasury regulations thereunder.
(j) Intentionally deleted.
(k) "Credit Facility Letter": Not applicable.
(l) "Dollars" or "$": United States Dollars.
(m) Intentionally deleted.
(n) "Eligible Receivables": Accounts receivable of Borrower which are
Receivables arising out of sales of tangible personal property made by Borrower
in the ordinary course of its business, which are no more than ninety (90) days
old from their invoice date, according to the original terms of sale, and, the
payment of which is not in dispute and in which the Lender has a first priority
security interest, provided however, that if fifty percent (50%) or more of the
Receivables from any account debtor are more than ninety (90) days old from
invoice date, all of said account debtor's Receivables shall be deemed
ineligible. The Lender may treat any Receivable as ineligible (i) if any
warranty contained in this or any related agreement is breached with respect
thereto; (ii) if the customer or account debtor has disputed liability or made
any claim with respect to the Receivable or the merchandise covered thereby or
with respect to any other Receivable due from said customer to the Borrower;
(iii) if the customer or account debtor has filed a petition for bankruptcy or
any other application for relief under the Bankruptcy Act, assigned for the
benefit of creditors, or if any petition or any other application for relief
under the Bankruptcy Act has been filed against the said customer or account
debtor, or if the customer or account debtor has failed, suspended business,
become insolvent, or had or suffered a receiver or trustee to be appointed for
any of its assets or affairs; (iv) if the customer or account debtor is located
outside the United States; (v) if the Receivable is a government receivable in
which the Lender will not be able to perfect its lien under the Federal
Assignment of Claims Act for any reason whatsoever; (vi) if the Receivable is
offset, in whole or in part, by a credit due and owing from the Borrower to that
account debtor; (vii) if the Receivable is due and owing from an account debtor
who is also a creditor of Borrower; (viii) if any portion of the Receivable
represents finance and service charges due and owing to Borrower from said
account debtor; (ix) if any portion of the Receivable represents a deposit
already collected by the Borrower, the amount of the Receivable which is
eligible for financing hereunder shall be reduced by an amount equal to the
amount of the deposit which has been collected by the Borrower from the
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account debtor; (x) if the Receivable is due and owing from an affiliate
corporation or related entity of Borrower or represents an intercompany account;
(xi) if the Receivable represents a consignment sale or warranty work; (xii) if
the Receivable represents a C.O.D. sale; (xiii) if the Receivable represents
sums due and owing from an employee of the Borrower; (xiv) if the Receivable
represents retainage due and owing to Borrower, (xv) if the Receivable
represents the billing for inventory which has not been delivered to said
account debtor; (xvi) if the Receivable represents a Xxxx and Hold Invoice for
items which have been billed and are not yet due and payable; (xvii) if the
Receivable represents sums due and owing for work and/or service currently being
rendered by Borrower but not yet completed by Borrower; (xviii) if the
Receivable arises from a progress billing for work not yet completed and
delivered to the customer; or (xix) if the Lender believes, in its credit
judgment in Lender's sole discretion, that collection of such Receivable is
insecure or that it may not be paid by reason of financial inability to pay or
otherwise or that such Receivable is not suitable for use as collateral
hereunder.
(o) "ERISA": The Employee Retirement Income Security Act of 1974, as
amended from time to time.
(p) "Event of Default": The occurrence of any one or more of the Events of
Default described in Article 9 hereof.
(q) "Financing Statements": Financing Statements and/or Financing
Statement Amendments from Borrower to Lender to perfect Lender's security
interest in the property described in the Security Agreements.
(r) "Generally Accepted Accounting Principles" or "GAAP": Those principles
of accounting set forth in opinions of the Financial Accounting Standards Board
of the American Institute of Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of the date of
any report required herein or as of the date of an application of such
principles as required herein.
(s) "Governmental Authority": Any federal, state, provincial, county,
municipal or other governmental department, commission, board, bureau, court,
agency, or any instrumentality of any other governmental entity.
(t) "Governmental Requirements": Any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, writ, injunction, franchise, permit,
certificate, license, authorization, or other direction or requirement of any
Governmental Authority now existing or hereafter enacted, adopted, promulgated,
entered or issued applicable to the Loans or to the Borrower.
(u) "Guaranty": An Absolute Unconditional and Continuing Guaranty executed
by the Guarantor guaranteeing repayment of the Notes and the Indebtedness, and
performance of all of the Borrower's obligations under the Loan Documents.
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(v) "Guarantor": CENTURY ELECTRONICS MANUFACTURING, INC., a Delaware
corporation, which shall guarantee the performance of all obligations and
repayment of all sums due under or in connection with the Loans, and all other
obligations of Borrower to Lender, and which shall execute the Guaranty and
certain loan documentation associated therewith.
(w) "Indebtedness": Collectively, all of the Borrower's presently existing
or hereafter created or assumed obligations to the Lender, including, without
limitation, obligations for borrowed money, notes payable and drafts accepted
representing extensions of credit (whether or not representing obligations for
borrowed money), obligations representing the Loans and any modifications or
renewals thereof, obligations representing indebtedness to the Lender whether or
not assumed, secured or unsecured, however and wherever incurred, acquired or
evidenced, whether primary or secondary, direct or indirect, absolute or
contingent, joint or several or due or to become due, including without
limitation, all such obligations, liabilities and all indebtedness and
obligations now or hereafter owed by Borrower to Lender, its affiliates,
successors and/or assigns.
(x) "Initial Advance": The first Advance of the Loan proceeds.
(y) "Landlord Acknowledgment Agreement": If and as applicable, an
agreement executed by each landlord and each entity that holds inventory of
Borrower at a certain business location acknowledging and waiving any and all
landlord's or other liens in connection with the inventory stored at said
location.
(z) "Landlord's Waiver of Lien Agreement": Waiver Agreements from all
Landlords where Borrower leases business properties waiving the Landlord's lien
at that location.
(aa) "Leases": Leases for all locations where Borrower leases property in
connection with its business operations.
(bb) "Loan Account". Borrower's account on the books of the Lender in
which Advances will be recorded, as well as payments made on the Loans and other
appropriate debits and credits as provided in this Agreement.
(cc) "Loan Documents": This Agreement, the Notes, the Security Agreements,
the Guaranty and all other associated loan documents executed in connection with
the making of the Loans (and any modification, renewal or extension thereof).
(dd) "Loan": A revolving line of credit in the maximum principal amount of
Fourteen Million and 00/100 Dollars ($14,000,000.00) from Lender to Borrower.
(ee) "Loans": The Loan and the Term Loan.
(ff) "Machinery and Equipment". All machinery, equipment, furniture,
fixtures, computer hardware and software, hand and power tools, trucks,
trailers, forklifts, automobiles, heavy
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equipment, and other motor vehicles, trucks, trailers, machinery and equipment
of all classes, together with all parts thereof and all accessions thereto,
wherever located, now owned or hereafter acquired by the Borrower.
(gg) "Maturity Date": As to the Loan, June 4, 2001, and as to the Term
Loan, June 4, 2001; upon which date the entire principal balance and accrued
interest and all other applicable charges under the respective Loans shall
become due and payable in full.
(hh) "Merger and Conveyance Documents": That certain Agreement and Plan of
Merger among Guarantor and Amitek Florida, Xxxxx Xx Park and Xxxx Xxxx Park
dated July 30, 1999, as amended, together with all closing and merger
documentation associated therewith, including, without limitation, all transfer
documents, opinion letters, resolutions, closing statements, promissory notes,
security documents, employment agreements, certificates and the Certificate of
Merger as filed with the Secretary of State of the State of Delaware and the
Articles of Merger as filed in the office of the Secretary of State of the State
of Florida; together with that certain Assignment and Assumption Agreement
entered into by and between Guarantor and Borrower whereby and whereunder all
assets of Amitek Florida obtained by Guarantor pursuant to the above described
merger, together with all obligations of Amitek Florida are conveyed to and
assumed by Borrower, as applicable.
(ii) "Note": An Assumption and Modification Master Revolving Promissory
Note in the principal amount of Fourteen Million and 00/100 Dollars
($14,000,000.00) from Borrower to Lender of even date herewith, and any
modifications, amendments or renewals thereof, evidencing the Loan.
(jj) "Notes": The Note and the Term Note, together with all amendments,
extensions and renewals thereof. The Notes shall be and are cross-collateralized
and cross-defaulted such that a default under either of the Notes shall be and
constitute a default under both of the Notes.
(kk) "Person": As the case may be, any corporation, natural person, firm,
joint venture, partnership, trust, unincorporated organization and government,
or any department or agency of any government.
(ll) "Plan": Any pension plan which is governed by the terms and
provisions of Title IV of ERISA and in respect of which the Borrower or a
commonly controlled entity of the Borrower is an "Employer" (as defined in
Section 407(d)(7) of ERISA).
(mm) "Prime Rate". The interest rate announced from time to time charged
by National Bank of Canada as its United States Prime Lending Rate, which rate
is purely discretionary and is not necessarily the best or lowest rate charged
borrowing customers of the Lender.
(nn) "Receivables". All accounts, accounts receivable, general
intangibles, contract rights and other obligations of any kind, whether now
owned or hereafter acquired by Borrower and all proceeds of the foregoing and
all rights now or hereafter existing in and to all security agreements,
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leases and other contracts security or otherwise relating to any such accounts,
contract rights, chattel paper instruments, general intangibles and obligations
and all proceeds, profits, deposits, products and accessions of and to all of
the foregoing.
(oo) "Reportable Event": Any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder.
(pp) "Security Agreements": Collectively, the Borrower's Security
Agreement and the Security Cash Collateral Account and Lockbox Agreement, which
provide a valid first lien on the property identified in the Security
Agreements.
(qq) "Security Cash Collateral Account and Lockbox Agreement". An Amended
and Restated Security, Cash Collateral Account and Lockbox Agreement whereby and
whereunder payment of all of Borrower's Receivables shall be directed to a
lockbox maintained with CITIBANK, F.S.B. to flow through the Cash Collateral
Account, and, be applied against the Loan and Term Loans facilities balances.
(rr) "Solvent": That, at the time of determination, (i) the fair market
value of the Borrower's assets (both at fair valuation and at present fair
saleable value on an orderly basis) is in excess of the total amount of its
liabilities, including contingent obligations; (ii) it is then able and expects
to be able to pay its debts as they mature; and (iii) it has capital sufficient
to carry on its business as conducted and as proposed to be conducted.
(ss) "Term Loan": A CAPEX line/term loan in the principal amount of Five
Hundred Seventy-Six Thousand Three Hundred Six and 54/100 Dollars ($576,306.54),
original amount One Million Six Hundred Seventy-Five Thousand and 00/100 Dollars
($1,675,000.00) from Lender to Borrower.
(tt) "Term Note": An Assumption and Modification CAPEX Line/Term
Promissory Note in the principal amount of Five Hundred Seventy-Six Thousand
Three Hundred Six and 54/100 Dollars ($576,306.54), original amount One Million
Six Hundred Seventy-Five Thousand and 00/100 Dollars ($1,675,000.00) from Lender
to Borrower of even date herewith, and any modifications, amendments or renewals
thereof, evidencing the Term Loan.
1.3 Other Definitional Provisions. (a) The terms "material" and
"materially" shall have the meanings ascribed to such terms under Generally
Accepted Accounting Principles as such would be applied to the business of the
Borrower, except as the context shall clearly otherwise set forth; (b) all of
the terms defined in this Agreement shall have such defined meanings when used
in other documents issued under, or delivered pursuant to, this Agreement,
unless the context shall otherwise require; (c) all terms defined in this
Agreement in the singular shall have comparable meanings when used in the
plural, and vice versa; (d) accounting terms to the extent not otherwise defined
shall have the respective meanings given them under, and shall be construed in
accordance with Generally Accepted Accounting Principles; (e) the words
"hereby", "hereto", "hereof', "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and
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not to any particular provision of this Agreement; (f) the masculine and neuter
genders are used herein and whenever used shall include the masculine, feminine
and neuter as well; and (g) whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include their heirs, personal
representatives, successors and assigns of such parties unless the context shall
expressly provide otherwise.
Article 2
THE LOANS
2.1 Loan. Provided there does not exist an Event of Default, and no event
with which notice or lapse of time or both would become such an Event of
Default, and subject to the terms and provisions of this Agreement, Lender will,
under the Note, lend or advance for the account of Borrower from time to time,
and, Borrower may borrow, repay and re-borrow (provided that unless Borrower
intends to pay and satisfy the Loan in full, Borrower shall not reduce the
outstanding principal balance under the Loan to a sum of less than One Thousand
Dollars ($1,000.00)) such amounts as may be required to partially assist
Borrower in connection with the Merger Transactions and to support general
working capital requirements of the Borrower, not exceeding in the aggregate an
amount equal to (A) (i) eighty-five (85%) percent of Eligible Receivables, less
such reserves as Lender, in its sole discretion elects to establish, provided
further that a Receivable may be devalued in such amount as shall be determined
by Lender in its sole discretion due to "Dilution" which is defined as and is
the result of non-cash credits posted against the Receivable which results in
payment or other satisfaction of all or any portion of the Receivable for
reasons other than full payment of the Receivable in cash, together with an
amount equal to (ii) thirty percent (30%) of the Borrower's raw materials and
finished goods inventory, which raw materials and finished goods inventory is
not supported by a firm buyback agreement in form and content acceptable to
Lender, in Lender's sole and absolute discretion, together with an amount equal
to (iii) sixty-five (65%) percent of Borrower's raw materials inventory,
work-in-process inventory, and finished goods inventory, when such inventory is
supported by a firm buyback agreement in form and content acceptable to Lender,
in Lender's sole and absolute discretion, all of which raw materials inventory,
work-in-process inventory and finished goods inventory set forth in (ii) and
(iii) above must be satisfactory to Lender in its sole and absolute discretion
(the "Eligible Inventory"); provided, that by way of example and not by way of
limitation, that inventory such as (a) inventory held at subcontractor's
locations, (b) slow moving inventory, (c) inventory classified as reserves on
the Borrower's balance sheets, (d) obsolete inventory, and (e) in-transit
inventory shall not be considered Eligible Inventory, provided further, that the
amount of advances for Eligible Inventory shall not exceed the sum of Seven
Million and 00/100 Dollars ($7,000,000.00) in the aggregate at any time; or, (B)
the aggregate sum of Fourteen Million and 00/100 Dollars ($14,000,000.00),
whichever is less. In connection with Advances based upon the Borrower
inventory, it is acknowledged that Lender shall determine, in its sole
discretion, which inventory shall constitute Eligible Inventory which is
eligible for financing hereunder. The aggregate amounts outstanding under the
Loan shall not at any time exceed the amount provided above, and in the event
the amount outstanding at any time exceeds the permitted amount, said excess
amount shall bear interest at the rate set forth in the Note and shall be due
and payable in full on DEMAND.
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2.2 Term Loan. The proceeds of the Term Loan were used by the Original
Borrower to partially finance capital expenditures of the Original Borrower. No
further advances may be made under the Term Loan.
2.3 Loan Closing Amendment Fee. Audit Fees and Unused Line Fees. In
connection with the Loans, the following fees and rates shall apply:
(a) LOAN CLOSING AMENDMENT FEE: A Loan Closing Amendment Fee in the amount
of One Hundred Thousand and 00/100 Dollars ($100,000.00) shall be due and
payable in connection with the Closing of the Loans, payable as follows:
(i) Twenty-Five Thousand and 00/100 Dollars ($25,000.00) shall be
payable at the time of Closing
(ii) Twenty-Five Thousand and 00/100 Dollars ($25,000.00) shall be
payable on November 1, 1999
(iii) Twenty-Five Thousand and 00/100 Dollars ($25,000.00) shall be
payable on February 1,2000
(iv) Twenty-Five Thousand and 00/100 Dollars ($25,000.00) shall be
payable on May 1, 2000.
Notwithstanding anything to the contrary set forth above, in the
event and at such time as the Loans are paid in full or upon the occurrence of
an Event of Default, whichever shall first occur, the remaining unpaid balance
of the Loan Closing Amendment Fee shall immediately become due and payable in
full.
(b) AUDIT FEES: There shall be quarterly audits (the frequency of which
may be adjusted at any time by Lender, in Lender's sole discretion) of the
Borrower performed in each fiscal year of Borrower during the term of the Loans.
There shall be a quarterly audit fee due and owing from the Borrower to Lender
in connection with said audits based upon a charge of Four Hundred and 00/100
Dollars ($400.00) per day plus expenses, subject to adjustment at any time.
(c) UNUSED LINE FEE: An unused line fee shall be charged in connection
with the Loan, such that the unused portion of the Loan shall be subject to an
annual fee of one-quarter of one percent (.25%) per annum to be calculated and
payable upon a quarterly basis based upon the average outstanding principal
balance under the Loan for the preceding ninety (90) days payable in arrears on
the first day of the first month following the previous quarterly period.
2.4 Loan Account. All Advances hereunder and under the Note shall be
recorded by Lender in the Loan Account.
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2.5 Loan Documents. Borrower's obligation to repay the Loans is evidenced
by the Notes delivered simultaneously herewith, which set forth the method for
payment, rates of interest, and such further terms as are therein set forth. The
repayment of the Notes and the Indebtedness is to be secured by the following
documentation, which documents Borrower shall deliver, or cause to be delivered,
to Lender simultaneously with the delivery of the Notes and which documents must
be received prior to any funding hereunder:
(a) The Security Agreements, in form and substance satisfactory to Lender
and Lender's counsel.
(b) Financing statements filed in such public offices as Lender and
Lender's counsel may deem necessary to perfect a security interest in any of the
personal property referred to in the Security Agreements.
(c) The Guaranty, in form and substance satisfactory to Lender and
Lender's Counsel, executed by the Guarantor.
(d) The Merger and Conveyance Documents, in form and substance
satisfactory to Lender and Lender's Counsel, shall have been executed and
delivered with the Certificate of Merger having been duly filed in the office of
the Secretary of State of the State of Delaware, the Articles of Merger having
been duly filed in the office of the Secretary of State of the State of Florida,
and all required consents to the merger shall have been obtained and all
required consents to the Merger Transactions shall have been obtained.
(e) Subordination Agreements, executed by Borrower and all appropriate
shareholders, officers, and directors of Borrower, as required by Lender.
(f) Borrower's Counsel Opinion Letter, in form and substance satisfactory
to Lender and Lender's Counsel, from Borrower's Counsel opining as to certain
matters concerning the Loans and the Merger Transactions.
(g) Such policies of liability insurance, worker's compensation insurance,
business interruption insurance and hazard insurance (with fire, extended
coverage, vandalism and mischief protection) as the Lender may reasonably
request, subject to standard loss-payee's and additional insured's endorsements,
as applicable, in the Lender's favor, and providing at least thirty (30) days
prior written notice of any cancellation, modification or non-renewal of the
insurance coverage.
(h) Incumbency Certificate and Resolutions of the sole shareholder and the
directors of the Borrower authorizing the Loans, and the execution of all Loan
Documents related thereto.
(i) Incumbency Certificate and Resolutions of the directors of the
Guarantor authorizing the Guaranty, and the execution of all Loan Documents
related to the Guaranty and the Loan.
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(j) Certificate of Good Standing evidencing that Borrower is in good
standing under the laws of the State of Delaware, the laws of the State of
Florida and in each other state in which Borrower is required to be qualified to
conduct business.
(k) Certified copies of the Articles of Incorporation and By-Laws of
Borrower.
(l) Evidence of compliance by the Borrower with the Florida Fictitious
Name Statute, if and as applicable.
(m) Certificate of Good Standing evidencing that Guarantor is in good
standing under the laws of the State of Delaware, the laws of the Commonwealth
of Massachusetts and in each other state in which Guarantor is required to be
qualified to conduct business.
(n) Certified copies of the Articles of Incorporation and By-Laws of
Guarantor.
(o) Certified copies of the Leases in connection with all leased premises
of the Borrower.
(p) Landlord's Waiver of Lien Agreement(s) and Landlord's Acknowledgment
Agreement(s) executed by all landlords and all other necessary parties at
business locations of Borrower or storage locations of Borrower's inventory,
waiving the landlord's lien.
(q) Financial statements of the Borrower and the Guarantor, in form and
substance acceptable to Lender.
(r) Such other documentation as may be required by Lender or Lender's
Counsel.
Article 3
MANNER OF MAKING LOAN ADVANCES
3.1 Advances. Each Advance to the Borrower under the Loan shall be made by
the Lender upon written request of the Borrower stating the date on which the
Advance is to be made (the "Borrowing Date"), and the principal amount of the
Advance requested, said Advance Request to be delivered by no later than 12:30
p.m. on the day of the requested Advance, together with a Remittance Report, on
National Bank of Canada form, in the form attached hereto and made a part hereof
as Exhibit "A" (the "Remittance Report"). The above set forth written forms may
be sent via facsimile, to be immediately followed by delivery of the original
forms to Lender. Any notice delivered under this subsection shall be irrevocable
and bind the Borrower to consummate the Advance on the Borrowing Date.
3.2 Borrowing Base Certificate. Advances will be made based on the most
recent Borrowing Base Certificate submitted by Borrower to Lender. The form of
the Borrowing Base Certificate is appended hereto and made a part hereof as
Exhibit "B" (the "Borrowing Base
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Certificate"). The Borrowing Base Certificate shall be provided by Borrower to
Lender, no less than one (1) time in each week in each month in each fiscal year
of the Borrower, or as otherwise required by Lender.
3.3 Supporting Documentation. At the time of the Advance, the Borrower
must deliver to Lender, such listings of Eligible Receivables and Eligible
Inventory and such other reports and documentation as shall be required by
Lender to support the Advance.
Article 4
INTEREST AND PAYMENTS
All interest under the Loans shall be computed on the basis of a year
containing three hundred sixty (360) days for the actual number of days elapsed.
Payments of interest (and principal under the Term Notes) shall be due and
payable to the Lender in accordance with the terms and provisions of the Notes,
and interest shall accrue at the rate of interest provided in the Notes for each
Advance thereunder. Each payment of principal, interest and/or fees, and any
other amounts required to be paid to the Lender with respect to the Loans, shall
be effectuated by means of an Advance under the Note; provided, however, that if
there is not adequate availability under the Loan to effectuate any such
Advance, Borrower shall be responsible for payment of the same. Payments of
principal, interest, fees or other amounts made by the Borrower shall be made to
the Lender at the Lender's offices located at 000 X. 00xx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, for the account of Lender, in Dollars and in
immediately available funds before 12:00 p.m. (New York time) on the date such
payment is due. The Lender shall deem any payment made by or on behalf of the
Borrower that is not made in immediately available funds and prior to 12:00 p.m.
(New York time) to be a nonconforming payment, which shall not be deemed to be
received by the Lender until the later of (a) the time such funds become
available funds or (b) the next Business Day. Any non-conforming payment may
constitute or become an Event of Default hereunder. Interest shall continue to
accrue on any principal as to which a non-conforming payment is made until the
later of (a) the date such funds become available funds or (b) the next Business
Day. All payments to be made by the Borrower on account of principal, interest
and/or fees, shall be made without diminution, setoff, recoupment or
counterclaim.
Article 5
CONDITIONS PRECEDENT TO FIRST ADVANCE AND ADDITIONAL ADVANCES
5.1 Conditions Precedent. The obligations of Lender to make the Initial
Advance and all additional Advances under the Loans are subject to the following
conditions precedent:
(a) Representations and Warranties. The representations, covenants and
warranties made by Borrower in this Agreement shall be true and correct on and
as of the date of such Advance.
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(b) No Default. There shall be no default, and no event which with notice
or lapse of time or both would become such an Event of Default, under this
Agreement, the Notes, the Security Agreements, or any other Loan Documents.
(c) Intentionally deleted.
(d) No Material Adverse Change. There shall have been no material adverse
change in the business or financial condition of the Borrower or the Guarantor
or in the value of the Collateral since March 31, 1999.
(e) Intentionally deleted.
(f) Intentionally deleted.
(g) Delivery of Loan Documents. All of the Loan Documents shall have been
duly executed and delivered to Lender, and the Merger and Conveyance Documents,
the Financing Statements and the Security Agreements (if applicable) shall have
been recorded in the appropriate public offices.
(h) Lien and Judgment Searches: Lien and judgment searches of the
Guarantor shall have been conducted with the Delaware Secretary of State, the
Massachusetts Secretary of State, Middlesex County, Massachusetts, the Florida
Secretary of State, Broward County, Florida, Palm Beach County, Florida, and any
other state or jurisdiction as shall be required by Lender. Additionally, lien
and judgment searches of Amitek Florida shall have been conducted with the
Florida Secretary of State, Broward County, Florida, and Palm Beach County,
Florida, and any other state or jurisdiction as shall be required by Lender. The
results of the above set forth lien and judgment searches must be satisfactory
to Lender, in Lender's sole and absolute discretion. Post closing searches will
be required in all jurisdictions.
(i) Delivery of Other Documents. Borrower shall have delivered, or caused
to be delivered to Lender, the other documents required under Article 2 hereof,
and shall have also delivered or caused to be delivered to Lender, the
following:
(i) Report on Receivables evidencing that there are adequate
Eligible Receivables to support the Initial Advance and each subsequent
Advance.
(ii) Report on all of Borrower inventory evidencing that there is
adequate Eligible Inventory to support the Initial Advance and each
subsequent Advance.
(iii) Such policies of liability insurance, flood insurance,
worker's compensation insurance, business interruption insurance and
hazard insurance (with fire, extended coverage,
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vandalism and mischief protection) as Lender may reasonably request
subject to standard loss-payee's and additional insured's endorsements, as
applicable, in the Lender's favor.
(iv) Such other certification or documentation to be executed by
Borrower as may be reasonably required by Lender or Lender's counsel
pertaining to the closing of the Initial Advance and all subsequent
Advances of the proceeds hereunder, it being understood that all such
items shall be promptly delivered prior to Lender's obligation to making
further Advances hereunder.
Article 6
USE OF LOAN PROCEEDS; MARGIN STOCK
The proceeds of the Loan shall be used to partially finance the Merger
Transactions and to support general working capital requirements of the
Borrower. The proceeds of the Term Loan have previously been used by Amitek to
finance capital expenditures of Amitek. Borrower does not own any margin
securities and no portion of any Advance or any of the Loans will be used for
the purpose of reducing or retiring any indebtedness which was originally
incurred by Borrower to purchase any margin securities, and neither the making
of any and all Loans and Advances, nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System of the United States.
Article 7
REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties. Borrower represents and warrants to
Lender that, so long as credit remains available to the Borrower or there is any
outstanding balance due under any of the Notes as secured by the Loan Documents:
(a) Borrower and the Guarantor, as applicable, have the power to engage in
all the transactions contemplated by this Agreement and have full power,
authority and legal right to execute and deliver, and to comply with their
respective obligations under the Loan Documents, which documents constitute the
valid and legally binding obligations of Borrower and Guarantor, as applicable,
enforceable against Borrower and Guarantor in accordance with their respective
terms.
(b) To the best of its knowledge and belief, there is no suit, action, or
proceeding pending or threatened against or affecting Borrower, before or by any
court, administrative agency or other Governmental Authority which brings into
question the validity of the transactions contemplated hereby or would interfere
with the ability of Borrower to comply with the terms hereof.
(c) Borrower is in good standing under the laws of the State of Delaware
and under the laws of the State of Florida and Borrower is in good standing and
fully qualified and authorized to do business in all states where it conducts
business. Borrower, prior to Closing, will deliver to Lender: (i) resolutions
certified as true by the secretary of Borrower authorizing Borrower's
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participation in connection with the transactions contemplated herein and
execution of the Notes, and related Loan Documents; (ii) incumbency certificates
of Borrower; (iii) certified copies of the Articles of Incorporation and By-laws
of Borrower; and (iv) Corporate Certificates of Good Standing for Borrower.
(d) Except as otherwise disclosed on Exhibit "C" appended hereto and made
a part hereof, during the one (1) year period preceding the date of closing, the
Borrower has not been known as or used any corporate of fictitious names other
than the corporate name of the Borrower on the Closing date. All trade names or
styles under which the Borrower sells inventory or equipment or creates
Receivables or to which instruments in payment of Receivables are made payable,
are set forth on Exhibit "C".
(e) The Borrower and the Guarantor own or possess all intellectual
property required to conduct its businesses as now and presently planned to be
conducted without, to their knowledge, conflict with the rights of others.
(f) Borrower and Guarantor are Solvent after giving effect to the
transactions contemplated by the Loan Documents.
(g) Neither the execution nor delivery of any of the Loan Documents, nor
any other document relating hereto, will conflict with or result in a breach of
any of the provisions of the Charter, Articles of Incorporation, By-Laws or
Partnership Agreement, where applicable, of the Borrower or the Guarantor or of
any applicable law, judgment, order, writ, injunction, decree, rule or
regulation of any court, administrative agency or other Governmental Authority,
or of any agreement or other instrument to which Borrower or the Guarantor is a
party or by which either of them is bound or constitute a default under any
thereof, or result in the creation or imposition of any lien, charge or
encumbrance upon any property of Borrower, other than those created under this
transaction in favor of Lender.
(h) No consent, approval or other authorization of or by any Governmental
Authority is required in connection with the execution or delivery by Borrower
or the Guarantor of the Loan Documents, or compliance with the provisions hereof
or thereof.
(i) There are no actions, suits or proceedings pending or, to the
knowledge of the Borrower or the Guarantor, overtly threatened against or
affecting the Borrower or the Guarantor, at law or in equity, or before or by
any Federal, State, Provincial, municipal or other Governmental Authority, which
involve any of the transactions herein contemplated or the possibility of any
judgment or liability which would result in any material adverse change in the
business, operations, properties or assets or in the financial condition of the
Borrower or of the Guarantor. Neither the Borrower nor the Guarantor are in
default with respect to (a) any judgment, order, writ, injunction or decree or
(b) any rule or regulation of any court or Federal, State, Provincial, municipal
or other Governmental Authority, which would have a material adverse effect on
its business, properties or condition (financial or otherwise).
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(j) Subject to any limitation stated thereon or by Borrower or the
Guarantor in writing, all balance sheets, earnings statements and other
financial data which have been or shall hereafter be furnished to the Lender to
induce it to enter into this Agreement or otherwise in connection herewith, do
or will fairly represent the financial condition of the Borrower and the
Guarantor as of the dates and the results of their operations for the period for
which the same are furnished to the Lender and have been or will be prepared in
accordance with Lender's requirements, and that all other information, reports
and other papers and data furnished to the Lender are or will be, at the time
the same are so furnished, accurate and correct in all material respects and
complete insofar as completeness may be necessary to give the Lender a true and
accurate knowledge of the subject matter. There are no material liabilities of
any kind of the Borrower or the Guarantor as of the date of the most recent
financial statements which are not reflected therein. There have been no
materially adverse changes in the financial condition or operation of the
Borrower or the Guarantor since the date of such financial statements. At
Lender's request, Borrower and the Guarantor shall provide financial statements
prepared in accordance with Lender's requirements, certified by Borrower and the
Guarantor or their respective accountants, as applicable, that said financial
statements are true and accurate, on an annual basis within one hundred twenty
(120) days of the end of the Borrower's and the Guarantor's fiscal year, as
applicable, and on an interim basis as may be required by Lender.
(k) Borrower will pay all obligations, including tax claims, when due,
except such as the Borrower contests in an appropriate proceeding, in which
event Borrower shall furnish to Lender, if requested, a bond or other security
satisfactory to Lender in an amount sufficient to protect Lender and its
interest herein.
(l) There is no default on the part of Borrower or the Guarantor under
this Agreement, the Notes, any of the Security Agreements, the Guaranty, or any
of the other Loan Documents.
(m) The Borrower hereby agrees to indemnify the Lender and to hold the
Lender harmless of and from any and all claims for broker's or finder's fees or
commissions in connection with the Loans, and agrees to pay all expenses
(including but not limited to attorney's fees and expenses) incurred by the
Lender in connection with the defense of any action or proceeding brought to
collect any such fees and commissions, or otherwise relating to any such
broker's claims resulting from or arising out of any claim that the Borrower
consulted, dealt or negotiated with the person or entity making such brokerage
claim.
(n) Each Plan, pension, profit sharing or other employee benefit plan,
maintained by Borrower and the Guarantor is in material compliance with ERISA,
the Code, and all applicable rules and regulations adopted by regulatory
authorities pursuant thereto. The Borrower and the Guarantor have filed all
material reports required to be filed by ERISA, the Code, and such rules and
regulations. In addition, any qualified Plans subject to the minimum funding
standards, do not, as of the date hereof, have a funding deficiency, as defined
by ERISA. No Reportable Event material in relation to the business operations,
property, financial or other conditions of the Borrower or the Guarantor has
occurred with respect to any Plan. No tax penalty nor other liability in the
aggregate material in
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relation to business operations, property, or financial conditions of the
Borrower or the Guarantor has been assessed against the Borrower or the
Guarantor with respect to a Plan.
(o) Borrower has filed or caused to be filed all tax returns, which to the
knowledge of the Borrower, are required to be filed, and has fully paid all
taxes shown to be due and payable on said returns or any assessments made
against it or its property, and all other taxes, fees, or other charges imposed
on it or any of its property by any Governmental Authority. No tax liens have
been filed and, to the knowledge of Borrower, no claims are being made or may
hereafter be asserted with respect to any such taxes, fees or other charges
except for (i) those, the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with Generally Accepted Accounting Principles have been
provided on the books of Borrower; and (ii) such failures to file or pay such
tax liens or claims as could not, in the aggregate, reasonably be expected to
have a material adverse effect on the business operations, property or financial
or other condition of the Borrower, and can not reasonably be expected to have
an adverse effect on the ability of the Borrower to perform any of its
obligations in any material respect under this Agreement, the other Loan
Documents, or under any other contractual obligation.
(p) All copies of all documents, reports, and statements heretofore
furnished by or on behalf of Borrower and the Guarantor, or in connection with
this Agreement, to the Lender are, and those delivered subsequent to the date
hereof will be, true and correct copies of the originals of such documents,
reports and statements. All matters stated or certified in any written
statement, certificate, report or other writing heretofore furnished pursuant to
this Agreement by or on behalf of the Borrower and the Guarantor to the Lender
are, and all matters stated or certified subsequent to the date hereof will be,
true and correct as of the date stated or certified. All such documents,
reports, statements, writings and certifications shall be in form and detail
satisfactory to the Lender.
(q) The Borrower and the Guarantor own or lease all of their properties
and assets reflected on the balance sheets referred to in Section 7.1(j) hereof.
(r) All of the properties and assets of the Borrower set forth in Section
7.1(q) are free and clear of all mortgages, pledges, liens, charges and other
encumbrances of any nature whatsoever.
(s) The Borrower and the Guarantor are not in default in the performance,
observance of fulfillment of any of the obligations, covenants or conditions
contained in any lease for real or personal property, which would have a
material adverse affect on their businesses and all such leases are valid and
existing and in full force and effect.
(t) The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940 and any amendments thereto.
(u) None of the employees of the Borrower or the Guarantor or any of their
subsidiaries are subject to any collective bargaining agreement and there are no
strikes, work stoppages, election or decertification petitions or proceedings,
unfair labor charges, equal opportunity proceedings, or
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other material labor/employee related controversies or proceedings pending, or,
to the best knowledge of the Borrower, threatening the Borrower or the Guarantor
or any of their subsidiaries, or between the Borrower or the Guarantor (or any
of their subsidiaries) and any of their employees, other than employee
grievances arising in the ordinary course of business which could not reasonably
be expected, individually or in the aggregate, to have a materially adverse
effect on the Borrower or the Guarantor.
Article 8
COVENANTS OF BORROWER
8.1 Borrower shall do, or cause to be done, all of the things necessary to
preserve, renew and keep in full force and effect, its corporate existence and
its rights, licenses, franchises and permits and shall comply with all laws
applicable to it, operate its business in a proper and efficient manner, and
substantially as presently operated or proposed to be operated, and at all times
shall maintain, preserve and protect all franchises and trade names and preserve
all property used or useful in the conduct of its business, and keep the same in
good repair, working order and condition, and from time to time make or cause to
be made any needed and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.
8.2 Borrower shall at all times maintain true and correct books and
records and shall keep its books and records in accordance with Generally
Accepted Accounting Principles, and shall furnish, and shall have the Guarantor
furnish, the Lender with such financial statements as may be required by Lender
on a yearly and interim basis as set forth in this paragraph and other parts of
this Agreement.
8.3 Borrower shall properly pay and discharge (a) all taxes, assessments
and governmental charges upon or against Borrower or its assets prior to the
date on which penalties are attached thereto, unless, and to the extent, such
taxes are being diligently contested in good faith by appropriate proceedings
and appropriate reserves therefor have been established; and (b) all lawful
claims for labor, materials, supplies, services or anything else which might or
could, if unpaid, become a lien or charge upon the properties or assets of the
Borrower, unless and to the extent only that the same are transferred to bond,
being diligently contested in good faith, and by appropriate proceedings and
appropriate reserves therefor have been established.
8.4 The Borrower shall maintain the Cash Collateral Account, into which
all proceeds of Receivables (as collected from the Lockbox and otherwise) will
be deposited on a daily basis.
8.5 The Borrower shall, at its expense, comply with all of the insurance
requirements set forth in this Agreement and the Security Agreements throughout
the term of the Loans.
8.6 The Borrower shall indemnify and save harmless Lender from any and all
loss or damage of whatsoever kind and from any suits, claims, or demands,
including, without limitation,
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Lender's reasonable legal fees and expenses, at all trial and appellate levels,
on account of any matter or thing arising out of this Agreement or in connection
herewith, or on account of any act or omission to act by Borrower in connection
with this Agreement and the Loans. The Borrower agrees to pay any and all taxes
(other than taxes on or measured by net income of Lender) incurred or payable in
connection with the execution and delivery of this Agreement and all Loans, as
well as all costs and expenses (including attorneys' fees) incurred by Lender in
enforcing this Agreement. Such obligation shall survive repayment of the Loans.
8.7 Lender shall have the right, from time to time hereafter and until the
maturity of the Loans, to secure printed publicity, in the form of tombstone ads
or other similar ads, through newspapers and other media concerning the Loans.
8.8 The Borrower shall: (a) make full and timely payments of the principal
and interest due and owing under each of the Notes and the Indebtedness of the
Borrower to the Lender, whether now existing or hereafter arising; (b) duly
comply with all of the terms and covenants contained in each of the Loan
Documents; and (c) at all times maintain the liens and security interests
provided for under or pursuant to this Agreement and all other applicable Loan
Documents as valid and perfected liens and security interests on the property
intended to be covered thereby.
8.9 The Borrower shall promptly notify the Lender upon the commencement of
any action, suit or claim or counter-claim or proceeding against or
investigation of the Borrower (except when such alleged liability is fully
covered by insurance).
8.10 Borrower shall pay all indebtedness and obligations promptly and in
accordance with its respective terms and pay and discharge promptly all taxes,
assessments, and governmental charges or levies imposed upon it or in respect of
its property, before the same shall become in default, as well as all lawful
claims for labor, materials, and supplies or otherwise which, if unpaid, might
become a lien or charge upon such property or any part thereof, and timely
comply with all applicable laws and governmental rules and regulations.
8.11 The Borrower shall promptly notify the Lender in writing of: (a) any
material assessments by any taxing authorities for unpaid taxes as soon as
Borrower has knowledge thereof; and (b) any alleged default by the Borrower in
the performance of or any modification of any of the terms and conditions
contained in any agreement, mortgage or indenture or instrument to which the
Borrower is a party, or which is binding upon the Borrower, and upon any default
by the Borrower in the payment of any of its indebtedness.
8.12 The Borrower shall provide to Lender annual audited financial
statements of Borrower, in form and substance acceptable to Lender, prepared in
accordance with GAAP, by a national "Big Six" accounting firm acceptable to
Lender, in form and substance acceptable to Lender, within one hundred twenty
(120) days following the end of each fiscal year of Borrower.
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8.13 The Borrower shall provide to Lender monthly internally prepared
financial statements of Borrower, in form and substance acceptable to Lender,
certified by Borrower's chief financial officer as being true and correct in all
respects, and otherwise in form and substance acceptable to Lender, within
thirty (30) days following the end of each monthly period in each fiscal year of
Borrower. In addition to the monthly financial statements, Borrower shall also
provide to Lender a Covenant Compliance Certificate in the form attached hereto
as Exhibit "D", which certificate shall be provided on a monthly basis within
thirty (30) days following the end of each monthly period in each fiscal year of
Borrower.
8.14 The Borrower shall provide to Lender annual audited financial
statements of Guarantor, in form and substance acceptable to Lender, prepared in
accordance with GAAP, by a national "Big Six" accounting firm acceptable to
Lender, in form and substance acceptable to Lender, within one hundred twenty
(120) days following the end of each fiscal year of Guarantor.
8.15 Borrower shall allow Lender to conduct an audit, examination and
inspection of the properties and places of business of Borrower, including the
Borrower's books and records (and to make extracts therefrom), and, including an
audit confirmation of the accounts receivable balances and ownership interest in
the inventory, assets and business property of Borrower. Such audits,
examinations and inspections shall be at the sole expense of Borrower. The cost
of such audits shall be Four Hundred and 00/100 Dollars ($400.00) per day, plus
expenses. Said audits, examinations and inspections shall be conducted on a
quarterly basis.
8.16 Borrower shall allow Lender to conduct appraisals of Borrower's
inventory, said appraisals to be conducted by Xxxx Xxxx Tech, Inc., or such
other firm as shall be acceptable to Lender, said appraisals to be conducted at
such times as shall be required by Lender in its sole and absolute discretion,
at the sole cost and expense of Borrower; provided however, that so long as the
Loans are in good standing and there has been no prior and no then existing
Event of Default, the frequency of said appraisals shall not exceed two (2)
times per calendar year on a semi-annual basis.
8.17 Borrower shall provide Lender, within one hundred twenty (120) days
after the end of each fiscal year of Borrower, projections reflecting the
Borrower's performance for the next two (2) fiscal years including a balance
sheet and profit and loss statement, with said projections to be broken down on
a monthly basis for the next fiscal year and on an annual basis for the second
year.
8.18 Borrower shall provide to Lender within one hundred twenty (120) days
after the end of each fiscal year of Guarantor, projections reflecting the
Guarantor's performance for the next two (2) fiscal years including a balance
sheet and profit and loss statement, said projections to be broken down on a
monthly basis for the next fiscal year and on an annual basis for the second
year.
8.19 Borrower shall provide to Lender monthly an aged analysis of all
outstanding Receivables of Borrower, in form and substance acceptable to Lender,
within fifteen (15) days following the end of each monthly period in each fiscal
year of Borrower.
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8.20 Borrower shall provide to Lender monthly an aged analysis of all
outstanding accounts payables of Borrower, in form and substance acceptable to
Lender, within fifteen (15) days following the end of each monthly period in
each fiscal year of Borrower.
8.21 Borrower shall provide to Lender monthly an analysis of all inventory
of Borrower, in form and substance acceptable to Lender, within fifteen (15)
days following the end of each monthly period in each fiscal year of Borrower.
8.22 Borrower shall provide to Lender a copy of Borrower's backlog report
in form and content satisfactory to Lender in Lender's sole and absolute
discretion, within fifteen (15) days of the end of each quarterly period in each
fiscal year of Borrower.
8.23 Borrower shall provide to Lender on a semi-annual basis, a complete
and updated listing of all of its customers and account debtors, which listing
shall include all of the customers' and account debtors' addresses and phone
numbers.
8.24 Borrower shall not sell or convey any of its stock or assets, except
in the normal and ordinary course of business, including any merger,
consolidation, or reorganization, and there shall be no change in the ownership
or management of the Borrower unless consented to in writing by Lender.
8.25 Borrower shall not incur any capital expenditures in excess of One
Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) in the
aggregate from the time of Closing through and including June 30, 2000, or in
excess of Three Million and 00/100 Dollars ($3,000,000.00) in the aggregate in
any fiscal year thereafter.
8.26 Borrower shall maintain a Minimum Tangible Net Worth (which is
defined as book net worth plus subordinated debt (which may not exceed the sum
of One Million Nine Hundred Fifty-Six Thousand and 00/100 Dollars
($1,956,000.00) for purposes of this calculation) minus good will (intangibles))
of not less than Two Million and 00/100 Dollars ($2,000,000.00) from the date of
Closing through and including September 29, 1999; not less than Two Million Five
Hundred Thousand and 00/100 Dollars ($2,500,000.00) from September 30, 1999
through and including December 30, 1999; not less than Three Million Five
Hundred Thousand and 00/100 Dollars ($3,500,000.00) from December 31, 1999
through and including June 29, 2000; and not less than Five Million and 00/100
Dollars ($5,000,000.00) from June 30, 2000 and at all times thereafter.
8.27 Borrower shall maintain a Current Ratio (which is defined as current
assets divided by current liabilities, it being acknowledged that for purposes
of this calculation the Loan is considered a current liability) of not less than
1.00 to 1 from the date of Closing through and including June 29,2000; and not
less than 1.05 to 1 from June 30,2000 and at all times thereafter.
8.28 Borrower shall maintain a Debt Ratio (which is defined as
consolidated total liabilities divided by tangible net worth) of not greater
than 14.00 to 1 from the time of Closing through and
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including September 29, 1999; not greater than 10.50 to 1 from September 30,
1999 through and including December 30, 1999; not greater than 8.00 to 1 from
December 31, 1999 through and including June 29,2000; and not greater than 5.50
to 1 from June 30,2000 and at all times thereafter.
8.29 Borrower shall maintain an Interest Coverage Ratio (which is defined
as earnings before interest and taxes minus extraordinary gain divided by
interest expense) of not less than 1.00 to 1 from the time of Closing through
and including December 30,1999, not less than 2.00 to 1 from December 31, 1999
through and including June 29,2000; and not less than 2.50 to 1 from June 30,
2000 and at all times thereafter. The Interest Coverage Ratio will be tested on
a rolling twelve (12) month basis.
NOTE: Compliance with the above set forth covenants shall be tested on a
monthly basis excepting for Capital Expenditures and Tangible Net
Worth, which shall be tested on an annual basis.
8.30 The Borrower will not assume, guarantee, endorse or otherwise become
directly or contingently liable in connection with any obligation of any other
person, firm or corporation without Lender's prior written consent, which
consent shall be in Lender's sole discretion.
8.31 The Borrower will not authorize, issue, grant or sell any shares of
its capital stock without prior written approval of Lender.
8.32 Borrower shall not incur any additional indebtedness (secured or
unsecured) or lease commitments during the term of the Loans in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate in each fiscal
year, without the prior written approval of Lender, which approval shall be in
Lender's sole discretion.
8.33 Borrower shall not make any loans to officers, directors and/or
employees of Borrower in excess of One Hundred Thousand and 00/100 Dollars
($100,000.00) in the aggregate in each fiscal year during the term of the Loans,
without the prior written approval of Lender, which approval shall be in
Lender's sole discretion. Borrower shall not convey or transfer any cash, assets
or property to any affiliate, subsidiary or related entity of the Borrower at
any time during the term of the Loans.
8.34 Borrower shall not declare or pay any dividends during the term of
the Loans.
NOTE: In connection with the above, all accounting terms used shall be
construed in accordance with GAAP.
8.35 There shall be no subordinate financing of any of the property
encumbered by the Security Agreements, or otherwise included in any collateral
pledged as security for the Loans ("Collateral"), and, no changes in the
borrowing entity without Lender's prior written approval.
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8.36 The Borrower shall give the Lender prompt written notice of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency, the outcome of which might adversely affect the
operations or financial condition of the Borrower or the Guarantor or adversely
affect the ability of the Borrower or the Guarantor to perform their respective
obligations under the Loan Documents.
8.37 The Borrower shall give Lender prompt written notice of any Event of
Default hereunder, or any event of default with respect to its or the
Guarantor's obligations under any of the other Loan Documents to which it or the
Guarantor is a party, indicating the nature and status thereof and the action
which the party giving such notice proposes to take with respect thereto.
8.38 Borrower shall not directly or indirectly engage in any business
activity which would represent a material change from the kind of business
activity currently engaged in by it, which in the aggregate would have a
substantial and material effect on the Borrower's businesses, without the prior
written consent of Lender, which consent shall be in Lender's sole discretion.
8.39 Borrower shall provide to the Lender all information reasonably
necessary for the Lender to verify the credit standing of Borrower and Guarantor
during the term of the Loans.
8.40 The Borrower shall establish no additional employee benefit plans of
any nature without the prior written consent of the Lender, which consent shall
not be unreasonably withheld. Each pension, profit sharing, or other employee
benefit plan, at anytime, maintained by the Borrower, shall be in material
compliance with ERISA, the Code and all applicable rules and regulations adopted
by regulatory authorities, pursuant thereto. The Borrower will cause to be filed
all material reports required to be filed by ERISA, the Code and such rules and
regulations.
8.41 The Borrower within ten (10) days after written request from the
Lender, will furnish a written statement in form satisfactory to the Lender,
duly acknowledged: (i) setting forth the unpaid principal balance of, and the
interest and other sums due on, the Indebtedness evidenced by the Notes and/or
secured by any of the other Loan Documents; (ii) stating whether or not any
offsets or defenses exist against the payments due under the Notes or any of the
other Loan Documents; (iii) stating the current maturity date of the Notes; and
(iv) setting forth such other information as the Lender may request from time to
time.
8.42 The Borrower will not assume, guaranty, endorse or otherwise become
directly or contingently liable in connection with any obligation of any other
person, firm or corporation without Lender's prior written consent, which
consent shall be in Lender's sole discretion.
8.43 The Borrower shall notify the Lender immediately of any change in the
name of the Borrower, the principal place of business of the Borrower, the
office where the books and records of the Borrower are kept or any change in the
registered agent of the Borrower for the purpose of service of process.
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8.44 The Borrower shall use the funds borrowed by the Borrower under this
Agreement solely for the purposes set forth in this Agreement. Additionally,
Borrower shall not transfer any funds borrowed by the Borrower under this
Agreement or any other funds of Borrower to the Guarantor, or to any other
affiliated or subsidiary corporation of the Borrower, during the term of this
Agreement.
Article 9
EVENTS OF DEFAULT
9.1 Events of Default. Each of the following is an Event of Default
hereunder:
(a) If Borrower fails to pay any installment of interest or principal
under either of the Notes when the same shall become due, subject to any
applicable grace period(s) set forth in either Note, if and as applicable;
(b) The dissolution, termination of existence, merger, consolidation or
reorganization of Borrower;
(c) Intentionally deleted.
(d) If there occurs any default or Event of Default under any other term
of this Agreement, either of the Notes, any of the Security Agreements, the
Guaranty or any of the other Loan Documents relating hereto or thereto, subject
to any applicable notice and/or cure periods set forth therein, if any;
(e) If any representation or warranty of Borrower hereunder shall prove to
be incorrect in any material respect;
(f) The commencement of levy, execution or attachment proceedings against
Borrower, or any principal thereof, or Guarantor, or the application for or
appointment of a liquidator, receiver, custodian, sequester, conservator,
trustee, or other similar judicial officer (and such appointment continues for a
period of forty-five (45) days), or the insolvency, in the bankruptcy or equity
sense, of Borrower, any principal thereof, or Guarantor;
(g) The assignment for the benefit of creditors, or the admission in
writing of any inability to pay any debts generally as they become due, or
ordering the winding up or liquidation of its affairs, by Borrower, any
principal thereof, or Guarantor, or the commencement of a case by or against
Borrower, any principal thereof, or Guarantor, under any insolvency, bankruptcy,
creditor adjustment, debtor rehabilitation or similar law, state or federal;
(h) The determination by Borrower, any principal thereof, or Guarantor to
request relief under any insolvency, bankruptcy, creditor adjustment, debtor
rehabilitation or similar proceeding, provincial, state or federal, including
without limitation the consent by any of them to the appointment
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of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official for it or for any of its respective property or
assets;
(i) There shall have occurred any material adverse change in the financial
condition of Borrower or the Guarantor;
(j) The issuing of any attachment or garnishment, or the filing of any
lien against the Collateral, or the pledge, assignment, transfer or granting of
a security interest by the Borrower of any equity in any of the Collateral
without the written consent of the Lender;
(k) The taking of possession of any substantial part of the property of
the Borrower or the Guarantor at the instance of any Governmental Authority;
(l) Falsity in any material respect of, or any material omission in, any
representation or statement made to Lender by or on behalf of the Borrower or
Guarantor in connection with the Loans;
(m) If the Borrower shall have failed to comply with any other agreement,
covenant, condition, provision or term contained in this Agreement, subject to
notice and a fifteen (15) day right to cure;
(n) There shall be entered against Borrower or Guarantor one or more
judgments or decrees;
(o) There shall occur an Event of Default by the Borrower in the
performance of its obligations under the Indebtedness, or under any other loan
agreement with the Lender and/or any other lender;
(p) There shall occur any default in the payment or performance of any
obligation of the Guarantor arising under its Guaranty, or pursuant to any of
the Loan Documents, subject to any applicable notice and cure period provided in
said documents, if any; or
(q) If at any time Lender deems itself insecure for any reason whatsoever
(notwithstanding any grace period in any Loan Documents), or if any change or
event shall occur which in Lender's judgment impairs any security for the Loans,
increases Lender's risk in connection with the Loans, or indicates that Borrower
or the Guarantor may be unable to perform their respective obligations under any
of the Loan Documents.
Article 10
SET-OFFS
In addition to any other rights the Lender may have at law or in equity,
if Borrower becomes insolvent howsoever evidenced, or any Event of Default
occurs and is continuing, any indebtedness
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from the Lender to Borrower, and any other property of Borrower held by the
Lender, may be set-off and applied towards the payment of the Indebtedness of
the Borrower under this Agreement (including, but not limited to all
Indebtedness evidenced by the Notes) to the Lender, including, without
limitation, any note payable to the Lender, whether or not such Indebtedness of
the Borrower to the Lender on such note or any part thereof shall then be due.
Article 11
LENDER'S REMEDIES IN EVENT OF DEFAULT
11.1 Upon the occurrence of any Event of Default, subject only to any
notice requirement and grace period expressly provided in the Notes, the
Security Agreements, or any other Loan Documents, if any, the Lender shall be
entitled to all of its rights and remedies hereunder, at law or in equity and
under the Notes, the Security Agreements, and any of the other Loan Documents,
including, without limitation, the right to declare the outstanding principal
balance of the Notes, the accrued interest thereon, and all other obligations of
the Borrower to the Lender under this Agreement, the other Loan Documents or
otherwise to be immediately due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
anything in this Agreement, the Notes or any of the other Loan Documents to the
contrary notwithstanding, and the Lender's obligation to make any additional
Advances hereunder shall be permanently terminated.
11.2 Lender may proceed directly against the Guarantor, with or without
exercising its rights against the Borrower, and obtain judgments against the
Guarantor.
11.3 All of the remedies herein given to Lender or otherwise available to
it shall be cumulative and may be exercised concurrently. Failure to exercise
any of the remedies herein provided shall not constitute a waiver thereof by
Lender, nor shall use of any such remedies prevent the subsequent or concurrent
resort to any other remedy or remedies which shall be vested in Lender by this
Agreement or at law or in equity. To be effective, any waiver by Lender must be
in writing and such waiver shall be limited in its effect to the condition or
default specified therein; but no such waiver shall extend to any subsequent
condition or default or impair any right consequent thereon.
Article 12
TAX INDEMNIFICATION
Borrower hereby agrees to and does hereby indemnify and hold harmless
Lender of and from any and all liability in connection with payment of any and
all intangible, documentary stamp, transfer, recording and other taxes due and
owing to the State of Florida, and all other applicable jurisdictions in
connection with the execution, delivery and/or enforcement of this Agreement,
the Notes, the Security Agreements, and all associated Loan Documents, together
with all penalties and interest associated therewith, if any. Accordingly,
Borrower does hereby authorize Lender to reimburse itself for any such taxes
that Lender pays upon behalf of Borrower from the proceeds under the Note, in
the event Lender, at any time, in its sole discretion, deems it necessary to pay
such taxes, together
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with any penalties and interest associated therewith. This indemnification shall
survive repayment of the Loans.
Article 13
CROSS-DEFAULT AND CROSS-COLLATERALIZATION
It is agreed, acknowledged and understood that the Loans, as evidenced by
the Notes and the Loan Documents, are cross-defaulted such that an event of
default by Borrower under either of the Notes or any of the Loan Documents shall
be and constitute a default under all of the Notes, this Agreement and all of
the Loan Documents entitling Lender to exercise all remedies provided herein and
in the Loan Documents in connection with the Notes, the Indebtedness and all
obligations associated therewith.
It is additionally agreed, acknowledged and understood that the Loans, as
evidenced by the Notes and the Loan Documents, are cross-collateralized such
that no collateral which secures the Loans shall be released without the
Lender's prior written consent, which consent shall be in Lender's sole and
absolute discretion, until such time as all of the Notes are paid and satisfied
in full.
Article 14
MISCELLANEOUS
14.1 Verification of Facts. Any condition of this Agreement which requires
the submission of evidence of the existence or non-existence of a specified fact
or facts implies as a condition the existence or non-existence, as the case may
be, of such fact or facts, and Lender shall, at all times, be free independently
to establish to its satisfaction and in its absolute discretion such existence
or non-existence.
14.2 No Levy or Attachment. No part of the Loans will be, at any time,
subject or liable to attachment or levy at the suit of any creditor of Borrower
or of any other interested party, or at the suit of any contractor,
subcontractor, sub-subcontractors or materialman, or any of their creditors.
14.3 Severability. If performance of any provision hereof or any
transaction related hereto is limited by law, then the obligation to be
performed shall be reduced accordingly, and if any clause or provision herein
contained operates or would operate to invalidate this Agreement in part, then
the invalid part of said clause or provisions only shall be held for naught as
though not contained herein, and the remainder of this Agreement shall remain
operative and in full force and effect.
14.4 Waiver. If Lender shall waive any provisions of the Loan Documents,
or shall fail to enforce any of the conditions or provisions of this Agreement,
such waiver shall not be deemed to be a continuing waiver, and shall never be
construed as such, and Lender shall thereafter have the right to insist upon the
enforcement of such conditions or provisions. Furthermore, no provision of this
Agreement shall be amended, waived, modified, discharged or terminated except by
instrument in writing, signed by the parties hereto.
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14.5 Entire Agreement. This Agreement and the documents expressly referred
to herein embody the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to the subject matter. This Agreement may
be changed, waived, discharged, or terminated only by an instrument in writing
duly executed by the party against which enforcement of such change, waiver,
discharge, or termination is sought.
14.6 No Violation. Anything in this Agreement to the contrary
notwithstanding, the Lender shall not be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
14.7 Notices. All notices given hereunder shall be in writing and
addressed as follows:
(a) Lender: NATIONAL BANK OF CANADA
0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Page, Vice President
with copy to: Xxxx X. Xxxxxx, Esquire
MOMBACH, XXXXX & XXXXXX, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
(b) Borrower: AMITEK CORPORATION
0000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
with copy to: Xxxx X. Xxxxxx, Esquire
XXXXXXXX & XXXXXX
00 Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(c) Guarantor: CENTURY ELECTRONICS MANUFACTURING, INC.
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx, CEO and President
14.8 Reproduction of Documents. This Agreement, the Loan Documents and all
other documents relating hereto or thereto may be reproduced by the Lender, and,
the Lender may destroy any original documents so reproduced. The Borrower agrees
and stipulates that any such reproduction shall be admissible in evidence as the
original itself in any jurisdiction or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was
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made by the Lender in the regular course of business) and that any enlargement,
facsimile, or further reproduction of said document shall likewise be admissible
in evidence.
14.9 No Partnership or Control. In no event shall the Lender's rights
hereunder or under any of the Loan Documents grant the Lender the right to or be
deemed to indicate that the Lender is in control of the business, management or
properties of the Borrower, or has power over the daily management functions and
operating decisions made by the Borrower. The Lender is the Lender only and
shall not be considered a shareholder, joint venturer or partner of the
Borrower.
14.10 Headings. The headings preceding the text of the sections of this
Agreement are used solely for convenience of reference and shall not affect the
meaning, construction, or effect of this Agreement.
14.11 Assignment or Participation by Lender. Lender shall have the right
at any time to convey or assign the Loans or any portion thereof, and,
additionally, shall have the right to sell a participation in the Loans to
another lending institution at any time that the Loans are outstanding, in any
amount as solely determined by Lender, and Lender is hereby authorized to
release all financial information of the Borrower to said assignee or
participating lender(s).
14.12 No Assignment by Borrower. Borrower shall not assign this Agreement
without the prior written consent of Lender, and any assignment in violation
hereof shall be of no force and effect and shall constitute an Event of Default
herein. Subject to the previous sentence, this Agreement shall extend to and
bind the parties hereto, and their respective successors and assigns.
14.13 Survival of Representations and Warranties. Except as otherwise
noted herein, all covenants, agreements, representations and warranties made
herein and in the Loan Documents shall survive the respective dates of
effectiveness thereof and shall continue in full force and effect so long as the
Loan Documents, or any of them, remain in effect or any of the obligations
evidenced thereby are outstanding and unpaid.
14.14 Conflicts. In the event of any conflict, inconsistency or ambiguity
between the provisions of this Agreement and the provisions of the Notes, the
Security Agreements, the Guaranty or any other Loan Documents, the provisions of
this Agreement shall control and prevail.
14.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. Any term used herein shall
be equally applicable to both the singular and plural forms.
14.16 Expenses. Borrower will pay all reasonable out-of-pocket expenses
incurred by Lender in connection with the preparation of the Loan Documents
(whether or not the transactions contemplated hereby shall be consummated), the
making of the Loans, the enforcement and protection in any legal or equitable
proceeding of the rights of the Lender in connection with the Loan Documents,
and in connection with any action or claim under the Loan Documents including
the
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Notes, or in any way related thereto, including, without limitation, the
reasonable fees and disbursements of counsel of the Lender.
14.17 No Usury. It is the intention of the parties hereto to comply with
the usury laws of applicable governmental authorities; accordingly, it is agreed
that, notwithstanding any provision to the contrary in the Notes, this Loan
Agreement or any of the other documents securing payment thereof or otherwise
relating hereto, no such provision shall require the payment or permit the
collection of interest in excess of the maximum permitted by law. In determining
the maximum rate allowed, Lender may take advantage of any state or federal law,
rule or regulation in effect from time to time which may govern the maximum rate
of interest which may be charged. If any excess of interest in such respect is
provided for, or shall be adjudicated to be so provided for, in the Notes, this
Loan Agreement or in any of the other documents securing payment thereof or
otherwise relating hereto, then in such event: (a) the provisions of this
paragraph shall govern and control; (b) neither Borrower nor its heirs, personal
representatives, successors or assigns or any other party liable for the payment
thereof, shall be obligated to pay the amount of such interest to the extent
that it is in excess of the maximum amount permitted by law; (c) any such excess
which may have been collected shall be either applied as a credit against the
then unpaid principal amount of the Notes or refunded to Borrower; and (d) the
effective rate of interest shall be automatically reduced to the maximum lawful
contract rate allowed under the applicable usury laws.
14.18 Waiver. The Borrower hereby waives any right to require a proceeding
first against any other party providing collateral, or to exhaust any security
for the performance of the Indebtedness. The Borrower further covenants that no
security now or subsequently held by the Lender for the payment of the
Indebtedness evidenced by the Notes made by Borrower under this Agreement, or
for the payment of any other Indebtedness of Borrower to the Lender under this
Agreement or the other Loan Documents, whether in the nature of a security
interest, pledge, lien, assignment, setoff, suretyship, guaranty, indemnity,
insurance or otherwise, and no act, omission or other conduct of the Lender in
respect of such security (excluding fraud, gross negligence or willful
misconduct), shall affect in any manner whatsoever the unconditional obligation
of the Borrower under this Agreement and the Notes, and the Lender may release,
exchange, enforce, apply the proceeds of and otherwise deal with any such
security without affecting in any manner the unconditional obligation of the
Borrower under this Agreement and the Notes.
Without limiting the generality of the foregoing, such obligations, and
the rights of the Lender to enforce the same, by proceedings, whether by action
at law, suit in equity or otherwise, shall not be in any way affected by (i) any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding up or other proceeding involving or affecting the Borrower
or others, or (ii) any change in the ownership of any of the capital stock of
the Borrower or any other party providing collateral for any of the
Indebtedness, or any of their respective affiliates.
The Borrower hereby waives to the fullest extent possible under applicable
law:
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(a) any defense based upon the doctrine of marshalling of assets or
upon an election of remedies by the Lender, including, without limitation, an
election to proceed by nonjudicial rather than judicial foreclosure;
(b) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; and
(c) any other event or action (excluding the Borrower's compliance
with the provisions hereof) that would result in the discharge by operation of
law or otherwise of the Borrower from the performance or observance of any
obligation, covenant or agreement contained in this Agreement, the Notes or any
other Loan Documents.
14.19 Indemnification. The Borrower shall indemnify and hold harmless the
Lender, and its directors, officers, employees and agents against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Lender is a party thereto) which it may pay or incur arising out of
or relating to, directly or indirectly, this Agreement, the Notes, the other
Loan Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loans hereunder.
14.20 Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal statutes and laws of the State of New York (other
than with respect to conflicts of laws), but giving effect to federal laws
applicable to national banks to the extent applicable, except as required by
mandatory provisions of laws and except to the extent that the validity or
perfection of the security interest created hereby, or remedies hereunder, in
respect of the Property or any other particular Collateral are governed by the
laws of a jurisdiction other than the State of New York.
14.21 Year 2000 Compatibility. Borrower shall take all actions necessary
to assure that Borrower's computer based systems are able to operate and
effectively process data including dates on and after January 1, 2000. At the
request of Lender, Borrower shall provide Lender assurance acceptable to Lender
of Borrower's Year 2000 compatibility. Borrower hereby covenants and agrees that
all of Borrower's information systems, including without limitation, all
computer hardware and software, networks, databases, and all other electronic
data storage, retrieval and computation hardware, software and devices of any
kind (collectively, the "Information Systems), have been and/or will be updated
and modified to accommodate and conform to the Year 2000 date change, and are
and/or will be in full compliance with any and all federal, state and local
laws, regulations and ordinances relating to the same, whether now in effect, or
hereafter enacted (collectively, the "Information System Laws").
Borrower hereby agrees, unconditionally, absolutely, and irrevocably to
indemnify, defend, and hold harmless Lender, its affiliates, successors,
assigns, and its officers, directors, employees, and agents against and in
respect of any loss, liability, cost, injury, expense, or damage of any and
every kind whatsoever (including without limitation, court costs and attorneys'
fees and expenses) which
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at any time or from time to time maybe suffered or incurred, directly or
indirectly, in connection with, with respect to, or as a direct or indirect
result of the failure of Borrower to update or modify its Information Systems to
accommodate and conform to the Year 2000 date change and/or fully comply with
all Information System Laws including, without limitation, any losses,
liabilities, damages, injuries, costs, expenses, or claims asserted or arising
under the Information System Laws, whether now known or unknown.
14.22 THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF ALL STATE AND FEDERAL COURTS SITTING IN NEW YORK
COUNTY, NEW YORK, AND AGREES THAT ALL SUMMONS AND OTHER COURT PROCESS ISSUED BY
SAID COURTS MAY BE SERVED UPON THE BORROWER, WITHIN OR OUTSIDE OF SAID COURTS'
TERRITORIAL JURISDICTION, BY MAILING THE SAME, BY REGISTERED OR CERTIFIED MAIL,
OR BY PERSONAL SERVICE, TO THE BORROWER AT ITS ADDRESS SPECIFIED HEREIN.
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT NO SUIT OR ACTION SHALL BE
COMMENCED BY BORROWER, OR BY ANY SUCCESSOR, PERSONAL REPRESENTATIVE OR ASSIGN OF
BORROWER, WITH RESPECT TO THE LOANS, THIS LOAN AGREEMENT OR ANY OTHER LOAN
DOCUMENTS, OTHER THAN IN A STATE COURT OF COMPETENT JURISDICTION IN AND FOR NEW
YORK COUNTY, NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT
IN THE UNITED STATES IN WHICH THE PRINCIPAL PLACE OF BUSINESS OF THE LENDER IN
THE STATE OF NEW YORK IS SITUATED, AND NOT ELSEWHERE. NOTHING CONTAINED IN THIS
PARAGRAPH SHALL PROHIBIT THE LENDER FROM INSTITUTING SUIT IN ANY COURT OF
COMPETENT JURISDICTION FOR THE ENFORCEMENT OF ITS RIGHTS HEREUNDER, IN THE
NOTES, IN THE SECURITY AGREEMENTS, OR IN ANY OTHER LOAN DOCUMENT.
14.23 Waiver and Release. AS A MATERIAL INDUCEMENT FOR THE LENDER TO
EFFECTUATE THE LOANS AND THE LENDER TO EXECUTE THIS AGREEMENT, THE BORROWER DOES
HEREBY RELEASE, WAIVE, DISCHARGE, COVENANT NOT TO XXX, ACQUIT, SATISFY AND
FOREVER DISCHARGE THE LENDER, ITS OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND
AGENTS AND ITS AFFILIATES AND ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS,
COUNTERCLAIMS, DEFENSES, ACTIONS, CAUSES OF ACTION, SUITS, CONTROVERSIES,
AGREEMENTS, PROMISES AND DEMANDS WHATSOEVER IN LAW OR IN EQUITY WHICH THE
BORROWER EVER HAD, NOW HAS, OR WHICH ANY PERSONAL REPRESENTATIVE, SUCCESSOR,
HEIR OR ASSIGN OF THE BORROWER HEREAFTER CAN, SHALL OR MAY HAVE AGAINST THE
LENDER, ITS OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, AND ITS
AFFILIATES AND ASSIGNS, FOR, UPON OR BY REASON OF ANY MATTER, CAUSE OR THING
WHATSOEVER, THROUGH THE DATE HEREOF. THE BORROWER FURTHER EXPRESSLY COVENANTS
WITH AND WARRANTS UNTO THE LENDER AND ITS AFFILIATES AND ASSIGNS, THAT THERE
EXIST NO CLAIMS,
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COUNTERCLAIMS, DEFENSES, OBJECTIONS, OFFSETS OR CLAIMS OF OFFSET AGAINST THE
LENDER OR THE OBLIGATION OF THE BORROWER TO PAY THE LENDER ALL AMOUNTS OWING
UNDER THE NOTES, THIS LOAN AGREEMENT, AND ALL ASSOCIATED LOAN DOCUMENTS AS AND
WHEN THE SAME BECOME DUE AND PAYABLE.
14.24 Amended and Restated Agreement. THIS AGREEMENT AMENDS AND RESTATES
THE ORIGINAL LOAN AGREEMENT SUCH THAT THE SECURITY INTERESTS, RIGHTS, DUTIES AND
OBLIGATIONS OF THE BORROWER AND THE LENDER CREATED BY THE ORIGINAL LOAN
AGREEMENT ARE NOT EXTINGUISHED, BUT ARE REAFFIRMED AND REMAIN IN FULL FORCE AND
EFFECT AS MODIFIED BY AND AS PROVIDED IN THIS AMENDED AND RESTATED LOAN
AGREEMENT.
INTENTIONALLY LEFT BLANK
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WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY MUTUALLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT TO ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED OR TO BE EXECUTED
IN CONJUNCTION HEREWITH, UNDER ANY OF THE LOAN DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF
EITHER PARTY. THE BORROWER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A
MATERIAL INDUCEMENT TO THE LENDER IN ACCEPTING THIS AGREEMENT, AND, THAT THE
LENDER WOULD NOT HAVE ACCEPTED THIS AGREEMENT WITHOUT THIS JURY TRIAL WAIVER,
AND, THAT THE UNDERSIGNED HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN
OPPORTUNITY TO CONSULT WITH AN ATTORNEY REGARDING THIS JURY TRIAL WAIVER, AND,
UNDERSTANDS THE LEGAL EFFECT OF THIS JURY TRIAL WAIVER.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
Signed, sealed and delivered in BORROWER:
the presence of:
AMITEK CORPORATION, a Delaware
corporation
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------------------- -----------------------------
Title: Secretary & Treasurer
---------------------------------- --------------------------
(Corporate Seal)
LENDER:
NATIONAL BANK OF CANADA,
a Canadian Chartered Bank
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx Page
---------------------------------- -----------------------------
Title: V.P.
---------------------------------- --------------------------
-00-
XXXXXXXXXXXX XX XXXXXXXXXXXXX )
COUNTY OF SUFFOLK )
The foregoing instrument was acknowledged before me this 30th day of July,
1999, by Xxxxx X. Xxxxxx as Secretary & Treasurer and on behalf of AMITEK
CORPORATION, a Delaware corporation, who |_| is personally known to me or |_|
produced his/her driver's license as identification.
/s/ Xxxx X. Good
------------------------------
NOTARY PUBLIC
Commonwealth of Massachusetts
Print/Type/Stamp Name:
Commission Expiration Date:
Notary Seal:
[NOTARY'S STAMP]
COMMONWEALTH OF MASSACHUSETTS )
COUNTY OF SUFFOLK )
The foregoing instrument was acknowledged before me this 30th day of July,
1999, by Xxxx Page, as Vice President of and on behalf of NATIONAL BANK OF
CANADA, a Canadian Chartered Bank, who |_| is personally known to me or |_|
produced his/her driver's license as identification.
/s/ Xxxx X. Good
------------------------------
NOTARY PUBLIC
Commonwealth of Massachusetts
Print/Type/Stamp Name:
Commission Expiration Date:
Notary Seal:
[NOTARY'S STAMP]
-35-
EXHIBITS
Description Exhibit
----------- -------
Remittance Report ................................. A
Borrowing Base Certificate ........................ B
Fictitious Names .................................. C
Financial Covenant Compliance Certificate ......... D
REMITTANCE REPORT
To Commercial Finance Department Company___________________
Prepared By_______________
[LOGO] NATIONAL BANK OF CANADA EOT_______________________
BANK USE ONLY
This Form To Be Used To Report Detail of Lockbox, Depository Transfer Check,
Wire Transfer or Correspondent Bank Transfer. This Form Must Be Completed For
Each Day's Remittance.
DETAIL MUST BE ATTACHED OR SHOWN ON REVERSE.
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FOR BANK USE ONLY
FORMAT |0|8|R| |C|M|L|
OBLIGOR NO. |_|_|_|_|-|_|_|_|_|
COLLATERAL NO. |0|3|_|_|_|_|
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PLEASE TYPE OR PRINT CLEARLY
DATE OF REMITTANCE ................ |_|_|-|_|_|-|_|_|
REMITTANCE REPORT NUMBER .......... |_|_|-|_|_|_|_|_|
(MO.)
1. GROSS REDUCTION TO ACCOUNTS RECEIVABLE ........... |_|,|_|_|_|,|_|_|_|.|_|_|
(To Be Reported on Line 3A
on Borrowing Base)
2. LESS DISCOUNTS ................. |_|,|_|_|_|,|_|_|_|.|_|_|
3. LESS OTHER (EXPLAIN ON BACK) ... |_|,|_|_|_|,|_|_|_|.|_|_|
4. TOTAL NONCASH REDUCTIONS TO ACCOUNTS
RECEIVABLE (2+3) ................................. |_|,|_|_|_|,|_|_|_|.|_|_|
-------------------------
5. ACCOUNTS RECEIVABLE CASH (1-4) ................... |_|,|_|_|_|,|_|_|_|.|_|_|
6. PLUS: CASH NOT RELATED TO
ACCOUNTS RECEIVABLE (EXPLAIN ON BACK) ............ |_|,|_|_|_|,|_|_|_|.|_|_|
-------------------------
7. TOTAL CASH REMITTED (5+6) ........................ |_|,|_|_|_|,|_|_|_|.|_|_|
(To Be Reported on Line 17 =========================
On Borrowing Base)
THE UNDERSIGNED HEREBY CERTIFIES THAT ALL CASH RECEIPTS, DISCOUNTS, AND OTHER
REDUCTIONS TO ACCOUNTS RECEIVABLE PREVIOUSLY UNREPORTED TO NATIONAL BANK OF
CANADA ARE SHOWN ABOVE AND THAT THE BORROWER IS NOT IN DEFAULT UNDER THE
SECURITY AGREEMENT, OR ANY SUBSEQUENT AGREEMENTS, BETWEEN THE BANK AND BORROWER.
AUTHORIZED SIGNATURE _______________________
EXHIBIT "A"
REMITTANCE DETAIL REPORT Remittance No. ______
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Customer Reference Gross Reduction A/R
Name Number To A/R Discount Other Cash
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$
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Totals
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Enter Line 1 Enter Line 2 Enter Line 3 Enter Line 5
on Remittance on Remittance on Remittance on Remittance
------------------------------------------------------------------
Cash Not Related To Accounts Receivable
To Be Applied To Loan Only
----------------------------------------------------------------------------
$
----------------------------------------------------------------------------
EXPLANATION
----------------------------------------------------------------------------
EXPLANATION
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EXPLANATION Sub Total: Cash Not Related to A/R Enter Line 6
on Remittance
-----------------
Total Cash Remitted Enter Line 7
on Remittance $
-----------------
[LOGO] NATIONAL CANADA FINANCE CORP.
BORROWING BASE CERTIFICATE
EOT# ____________________
Format |_|_|R|-|C|M|L|
Obigor # |_|_|_|_|-|_|_|_|_|
Collat # |0|3|_|_|_|_|
As of Date |_|_|-|_|_|-|_|_|
Bank Use Only
CUSTOMER NAME: _____________________________ -------------------------------
CERTIFICATE NUMBER: _____________
1. ACCOUNTS RECEIVABLE CONTROL (Line 6 of previous Certificate dated ___________) $____________
2. Additions to Accounts Receivable Control since last Certificate
(A) New Sales Dated: ________ - _________ $____________
(B) Other Additions (Explain on back) ____________
(C) TOTAL ADDITIONS +____________
3. Reductions to Accounts Receivable Control since last Certificate
(A) Gross Reductions (Line 1 of Remit # ________ - _________ $____________
(B) Credit Memos issued since last Certificate ____________
(C) Other Reductions since last Certificate (Explain on back) ____________
(D) TOTAL REDUCTIONS -____________
4. Accounts Receivable Control (Line 1 plus 2C minus 3D) $
============
5. Adjustment to Accounts Receivable Control (See instructions
and explain on back) +/-____________
6. ADJUSTED ACCOUNTS RECEIVABLE CONTROL $
============
7. Total Ineligible Accounts (Line 5 of previous Recapitulation
dated __________) -____________
8. Eligible Accounts Receivable (Line 6 minus 7) $
============
9. Accounts Receivable Availability (______% of line 8) $____________
10. Inventory Availability (Line 13 of previous Recapitulation; Inventory
dated ___________) +____________
11. Other Availability: ________________________________________________________ +____________
12. Other Availability: ________________________________________________________ +____________
13. Holdbacks for Letters of Credit and Acceptances or Other as detailed in
schedule on back -____________
14. Total Gross Availability
(The lesser of the totals of lines 9, 10, 11, 12 and 13
or Creditline of $________________) $
============
15. Beginning Loan Balance (Line 19 of previous Certificate dated __________) $____________
16. Plus Borrowing requested +____________
17. Less Cash remitted against Loan since last Certificate
(Reported on line 7 of Remit)
(Note: Remittance numbers should correspond to those noted above on line 3A)
Remit # _______ Amt $ ____________ Remit # _______ Amt $ ____________
Remit # _______ Amt $ ____________ Remit # _______ Amt $ ____________
Remit # _______ Amt $ ____________ Remit # _______ Amt $ ____________
TOTAL CASH REMITTED -____________
18. Adjustments to Loan Balance (Explain clearly on back) +/-___________
19. New Loan Balance (Line 15 plus 16 less 17 plus/minus 18) $
============
20. Net Availability (Line 14 minus line 19) $
============
Certification:
(A) Borrower hereby certifies that they are not in default under the
Security Agreement or any of the Borrower's liabilities.
(B) No Remittances have been received from or returns and allowances granted
to any debtors whose accounts have been assigned to the National Canada
Finance Corp. other than previously reported.
(C) We hereby assign to National Canada Finance Corp. all accounts which came
into existance since our last Certificate, and all rights, title and
interest of the undersigned in and to the goods represented thereby, and
all monies due or to become due thereby.
_____________________________
(Date)
_____________________________
(Authorized Signature)
EXHIBIT "B"
Explanation of Line 2B "Other Additions":
___________________________________________________________________ $__________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
Total "Other Additions" as shown on Line 2B on Front $
==========
Explanation of Line 3C "Other Reductions"
___________________________________________________________________ $__________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
Total "Other Reductions" as shown on Line 3C on Front $
==========
Explanation of Line 5 "Adjustment to Accounts Receivable Control"
___________________________________________________________________ $__________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
$
==========
Explanation of Line 18 Loan "Adjustments"
___________________________________________________________________ $__________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
___________________________________________________________________ ___________
$
==========
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COMMERCIAL LETTERS X RECIPROCAL OF = HOLDBACK
OF CREDIT INVENTORY AMOUNT
ADVANCE RATE
1. $________________ X ____________% = $ ______________
2. $________________ X ____________% = $ ______________
3. $________________ X ____________% = $ ______________
4. $________________ X ____________% = $ ______________
5. STANDBY LETTERS OF CREDIT================ $ ______________
6. BANKER'S ACCEPTANCES===================== $ ______________
7. XXXX OF LADING GUARANTEES================ $ ______________
8. OTHER - Explain _________________________
_________________________________________
__________________________________________ $ _____________
9. Total Holdback carried forward to line 13
on Front $
=============
The above balances are as of ___/___/___
Exhibit "C"
Fictitious Names
None.
